Immigration and H-1B Visa Reform — Dead on Arrival, or Alive and Kicking?

I’ve blogged before about the impending immigration reform, with its accompanying H-1B visa reform and onerous provisions that will reshape the global services industry. Congress is now halfway down the path to deciding on immigration reform.

The scuttlebutt in the global services industry is that immigration reform is dead and there’s no need to worry about H-1B visa reform any longer. But we think it’s too early to take that position.

Let’s review where we are. The Senate passed its version of the bill, and all the onerous H-1B provisions that are unfavorable to the global services industry remained intact. The bill is running into opposition in the House. But that doesn’t mean it’s dead.

The Republican-controlled House is taking an approach of dealing with immigration issues in a series of separate bills rather than one large piece of immigration reform. If these indeed make their way through the House, its cumulative version will have a substantially different structure than the Senate version.

It remains to be seen whether or not the bill will pass. But there is tremendous pressure on Congress and on the Republicans to break their deadlock and get something done, especially immigration reform. We think it’s a mistake for the services industry to underestimate the extremely strong political pressure.

At this point there is still a significant likelihood that the legislation will move through the House in a piecemeal fashion. The contentious issues such as border control and path to citizenship, which are central issues for Republicans, likely will be dominate the House version of the legislation.

If the House manages to get to a politically acceptable position regarding border control and path to citizenship, we believe they will will have little political support or interest in confronting the Senate on the H-1B visa reform issues. As mentioned in our earlier blogs on visa reform, no constituency is vocal in lobbying against the scalding provisions targeting the Indian service providers whose business models heavily depend on H-1B visas.

Therefore, if the House passes its version, we think there is a distinct possibility that the onerous provisions in the Senate’s version of H-1B visa reform will slip through, unopposed, into the eventual legislation.

This is potentially the worst scenario for those who are against the onerous visa reform scenarios.

We believe these provisions still have a strong pulse and the targeted Indian service providers should still be concerned and look at potential mitigation strategies.